Increase Your Revenue With Point Of Sale Financing

2020-10-12

Increase Your Revenue With Point Of Sale Financing

Why point of sale financing is important?
A common challenge most online businesses face is the abandoned cart. In some cases, you can win over a customer with follow up emails, abandoned cart discounts, or remarketing campaigns, but for most, once the moment has passed, that customer has probably moved on. The potential sale has vanished and so has the opportunity to build a relationship with your customer.

Unfortunately, this trend has become more apparent amidst the COVID19 pandemic because paying the total amount upfront is just not a luxury most can afford. As a result, your sales take a dive.

There are many other reasons behind an abandoned cart, but a major factor behind it is the limited amount of financing options. Offering credit card payments alone is simply not going to cut it in these financial times. Consumers are turning down these traditional lines of credit due to the skyrocketing interest rates, fluctuating monthly payments, and exorbitant admin fees.

So what is the solution to this common problem and how do you start increasing your revenue without slashing prices? The answer is simple – Point Of Sale financing.

What Is Point Of Sale Consumer Financing?

Simply put, Point Of Sale financing, or buy now, pay later is an online financing option that allows consumers to purchase your products without paying the total amount upfront. Instead, they are asked to fill out a short application for an instant loan on the checkout page. Their details are vetted against a network of lenders and once approved, they are able to pay back the amount in affordable installments over a few months.

So how does this increase your revenue as the merchant?

Visitors Become Customers

Imagine this scenario, you are browsing a store, adding all the goods you want to your basket only to find that the total price is a lot more than you bargained for and there are very limited financing options to choose from. In this case, the customer will leave without any goods, and you are left without a sale.

But what if you allowed a customer to apply for a microloan in a few seconds and pay for the goods in affordable and transparent monthly payments? The outcome will most likely be in your favor. Your customer will be more willing to close the sale, and may also be enticed to purchase products of a higher value.

Merchants who partner with ChargeAfter see a 30% increase in overall sales growth and a 45% increase in average order value.

Increased Customer Lifetime Value

Customer lifetime value is the most important metric when it comes to your business. Giving your customers a pleasurable and seamless experience with simple consumer financing options will not only help increase purchase frequency and average order value, but it will also build loyalty to your brand. Retaining an existing customer is more cost-effective than acquiring a new one.

Higher Approval Rates

The reality is that there are a lot of people who do not qualify for other forms of credit like store cards and bank credit cards. Not to mention the lengthy process that they have to go through in order to get the credit approved. Many shoppers are able to afford monthly installments but are still turned away due to their credit history, income, and existing debts. Prime lenders usually only approve low-risk borrowers, which means that approximately 70% of applicants are turned away.

With a multi-lender Point Of Sale financing platform like ChargeAfter, customers are connected to a diverse network of prime, near-prime, and subprime lenders. Once a customer opts for the buy now, pay later option, their application will be vetted against prime lenders. Should the applicant be rejected, their details are matched against a network of near-prime lenders for a second look. If the customer doesn’t meet the criteria, they are referred to subprime lenders for approval. ChargeAfter provides up to 85% approval rates, which means your customers stand a higher chance of getting the loan and buying your goods.

Your customers get to enjoy more buying freedom and as the merchant, you get to enjoy more sales and return customers.

 

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About the author
Chris Lloyd
“ChargeAfter is amongst our top rung of partnerships, and they enable us to deliver consistent. The conversion uplifts ChargeAfter creates helps drive strong value for DXL Group and our customers.”